Cut your tax bill with these 8 top tips - Self-employed tax return
I recently published a checklist on how to get ready for your income tax self assessment. Now, let’s look at minimising your tax liability.
I'm no accountant, in fact, I'm filled with dread when I think of the tax man. So, this year, I want to be prepared, save money and share all the really useful stuff that I discover along the way so that you can save too. I worked with Digiyell's very own startup accountant Paddy Quinn to compile some of the top tax saving tips for self-employed that we sometimes miss.
To get a full view, get talking to your accountant but in the meantime here are 8 tax saving tips to consider if you are self employed/sole trader.
1. Your household bills
Do you run your business from home?
You can claim a percentage of your household bills if you run your business from home. Anything from 20-30% is about average, unless you can prove it’s more.
Household bills you can consider including:
Refuse (if relevant)
2. Your car
Do you use your personal car?
Claim running expenses for your car/van. Anything from diesel (not petrol), maintenance and repairs. Note: as self employed you cannot claim mileage at civil service rates, this is a common mistake and even some accountants can get confused so here is the link to revenue guidance.
3. Don’t forget your online receipts
This is an obvious one, but don’t overlook online receipts. With so many online purchases these days, sometimes I forget about my online receipts. Online apps, accounting solutions, web platforms, hosting, CRO registrations, anything that has an online receipt be sure to record it against your business expenses.
There are some great apps out there to record your receipts – try WAVE. I'm smitten with it's ease of use and the fact that it's free! Who doesn't love free?
4. Preparing for the future - tax relief on pension contributions
There are tax benefits to paying into your pension, make sure you are getting the right allowances.
5. Charity contributions
If you haven’t given the charity authority to claim the relief, you can claim a blended rate of 31% back on charitable donations over €250 in a single year.
6. Does your spouse help you out?
Most spouses will play a role in their partners business whether they choose to or not! You may be in a position to hire your spouse to maximise your tax credits and minimise your tax bill.
7. Been to the doctors recently?
There is a huge amount of us not claiming our medical expenses, you could be missing out. Medical expenses including prescription costs, doctors fees, consultants, hospital fees and non-routine dental fees can all be claimed at a rate of 20%.
8. Make sure you are getting all of your credits, reliefs and exemptions:
There are a whole bunch of credits, reliefs and exemptions available that we are not all accessing. Talk to your accountant or take a look at the revenue website to see if there are any you are not yet accessing.
So now you are all set for your self employed self-assessment. Get it out of the way so you can keep focusing on what’s really important – growing your business.
If you are not already doing it, now's the time to take a closer look at your finances. I'll be publishing some of the key financial metrics small businesses should be on top of. If you sign up here, we'll make sure you don't miss it
All the best